Tax incentives intended to encourage entrepreneurs should not fall foul of a clampdown on private equity managers who take advantage of capital gains relief, the British Chambers of Commerce (BCC) has said. The BCC urged that any change aimed at curtailing unfair tax avoidance through capital gains relief should take into account the effects it may have on the small business and entrepreneurial community. An interim report on the private equity sector from the powerful Commons Treasury Committee has recommended that the Treasury and HM Revenue and Customs examine whether tax breaks on company debt are jeopardising millions of pensions. The report also calls for more public accountability in the light of the growing boom in private equity buyouts. Responding to the report, David Frost, the BCC director general, warned against any reactions that could harm the development of small enterprises. Mr Frost said: “While the BCC recognises the advantages private equity managers can take of capital gains taper relief to pay lower rates of tax, we worry that any knee jerk changes could have serious implications for the entrepreneurial culture embedded within our membership.” He added: “Through private equity, budding entrepreneurs invest in business, taking on the risk of attempting to run them successfully. The current capital gains system provides incentives for these entrepreneurs to do so, with the vast majority building on these investments to drive growth and create jobs. We urge the Government to ensure that no change is considered which would impair the incentives for these entrepreneurs.” Date:31 July 2007
Content by: Made Simple Group
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